A channel partner strategy in 4 steps and 60 seconds [video]

Selling a great solution to a willing market through the wrong channel is almost always going to generate really disappointing results.

Marketers, particularly consumer marketers often use the term channel to mean a tactic where there’s a channel. Radio is a channel, TV is a channel. Salespeople and most B2B marketers use the term channel to mean the sales channel, directly, indirectly or type of indirect, et cetera. Now that we’re on the concept of sales channel, what kind of channel partner strategy is going to work best for your business and how do we make that decision? Stick around for today’s video. I’m going to answer that question. I’m going to do it in 60 seconds and apparently I’m going to do it in 4 steps because that’s what it said at the headline. Four steps, 60 seconds, how to set a channel partner strategy. If you stick around to the end of that, I’ll also share with you a tool tip, and I’ll show you how we do it in Funnel Plan.

What type of channel do I need? What type of channel will serve me best? That’s completely the wrong question. We think too much about ourselves. Think instead about the buyer. What kind of sales channel does the buyer most want to buy through? That’s the most important question. Think about the buyer, any buyer who’s very, very new to a category. There’s a new kind of category like tablet computing was 4 years ago, let’s say. Back then, I would say, gee, that’s a really interesting idea. I wonder how I can use it? What kind of channel would serve that buyer best? It’s an innovative idea, so then they need to deal with the innovator to the fullest extent that they can. The really early adopters want to get as close to the point of innovation as they can. Now maybe the innovator is Apple back in the day or maybe the innovator is the channel who’s using the tablet computer in a really interesting way, but it’s not a high street reseller. It’s an innovative seller as close to the point of innovation as you can get. Normally, for most of us, that means selling directly.

After that the buyers who haven’t really bought from that early, that first wave, they’re just waiting for a little bit of proof to emerge. I’m going to make reference here to Geoffrey Moore’s chasm theory because that’s obviously what I’m drawing from. Let’s take a look at the chasm here. We’re talking about the early adopters here first, and the early adopters are the risk takers. They’re willing to take a risk because what they want is a high return. If that’s the case, the next group of buyers just aren’t that willing to take a risk. They need a little bit of proof. The channel they want is the channel that most understands this space. Again, we’re not talking high street resellers at this point. After we’ve earned multiple segments, then whether you get a buyer is no longer a question. The question is, from whom? That’s the point where convenience really matters. No longer do we need as the buyer, do we need an industry specialist. We just need the most convenient seller. As we’re ramping up the curve, now we want the convenient reseller, and that’s where we want the third party reseller who’s most convenient to us.

Now market starts to max out at the top. What kind of buyer do we have there? Often we’ve got the infrastructure buyer meaning it’s IT or it’s finance or it’s HR, no longer the end user department. What kind of channel do they want to buy from? They want to buy from the one who can comply with their requirements the best. Often that actually means in theory I want to buy from a reseller but in practice, the larger customers are starting to insist that they buy again directly from the vendor. We’ve got this notion where in the beginning, the vendor will sell directly. Then as the markets mature a little bit, we’re still selling directly. Then we’re selling through a channel, and then the vendor often has to sell themselves. Why, when the market has peaked? Because often the channel is losing interest, and they’re moving onto other topics. Now the market starts to decline. Where are we at there? What’s the buyer looking for?

Frankly, if you’ve run the race and won, you’re the guerrilla in that market, you get 2 choices. If you haven’t run the race and won, you’re probably exiting the market at this point or being bought out. Now if you have won the race, and you’re the guerrilla in the market, then probably we’re actually looking for new users and new uses. Those new users and uses are like new buyers. Once again they want to buy from the innovator. Whoever it is that’s innovating whether that’s you or a third party, that’s who they want to deal with. They don’t want to deal any more with a convenient buyer. It’s now up to the innovator to sell directly. In the main, therefore, we’ve gone direct, indirect, direct again and still direct at the end. That’s the best channel partner strategy. Let me tie all that together in 60 seconds in 4 steps. Four steps in 60 seconds. Firstly, get the order right. Think about your buyer first, yourself second and your channel third. Focus on the buyer.

Secondly, decide the channel strategy that the buyer most wants. Thirdly, sweat the detail. It’s not just a question of direct or indirect. What kind of direct? What kind of indirect? For example, the earlier adopter wants to buy from the innovative seller so don’t put your plotter out into the field at this stage. You want to be selling with a strategic frame of mind, able to have new conversations with new buyers. It’s the kind of buyer, pardon me, the kind of seller that the buyer most wants. Fourthly, sell your vision for the channel partner strategy. If you’ve worked out what the right answer is, make sure that the rest of the business buys into that answer because if you’re doing one thing, and they’re doing something else, it doesn’t work. That’s it. Hope it helps. For the tool tip this week, I want to talk about a thing called Optimizely. You may already know about the idea of AB testing. Basically, it’s remove all variables but one and then test 2 options, an A and a B against each other and let the market tell you which one is the winner. It works for landing pages, works for email copy, works for lots of tactics.

I want to now apply this to webpages. If your webpage has a conversion task whether that conversion is a form fill or even just a click the next button, whatever that conversion target is for your webpage, use a tool, we use Optimizely. Use a tool for testing different variations. What Optimizely lets you do, it’s really super clever, is it takes control of a certain page. When any visitor goes to that page, your website has been told for this page, race off to Optimizely and see if they have any changes for us and then present either the A or the B. What you then do in Optimizely as the marketer is you can muck around with the page. Let me show you an example here of 2 pages. In one, we’ve removed all of the social proof that we thought to be so important and left a single call to action. What do we find when we tested with social, without social? We got a 4 times higher conversion rate once we removed all the other alternatives. Optimizely lets you test hypotheses like that. I hope that helps.

As you know, Funnel Plan is a great way to decide and then articulate your objectives, your strategy, your velocity and the tactics that marketing and sales are going to use together end to end to earn the right to serve new businesses. We’re talking today about channel. I want to dive into 2 components. One is the target market, which so shapes the channel as I’ve just argued and the actual channel itself. Now you can see on the chasm diagram here that … Tiny print, you won’t be able to read it. Let me read it for you. Twenty percent of our market is in early adopter mode, and 80% is in bowling alley, which is this first stage after the chasm. In fact, you can see those same numbers up here. Let me dive into the software and show you where that comes from and then finally how we get to this section, the through home or the channel. Starting with the buyer, not the channel for the reasons we already argued.

Who are we selling to? We’re selling to this type of business and this role, and we’re giving them this amount of our love. Here’s the important thing. How mature do we think that group of buyers will be as they go into the market? In the early market, they’re going, that’s a really clever idea. Show me how that would work for my business. In bowling alley, they’re saying, prove it. Show it to me, very different buyer. Now we said that 20% of our market is in early market, and 80% is in bowling alley. Let’s take a look at the channel strategy that we’re going to build to reflect that. Two elements of channel strategy. One is very simple, and that’s the articulation of the channel, who are we going to sell to? Now take a look at what we’ve written here. Internal marketing profiles, that’s really just describing the channel role. Then warms the prospect before sales involvement. Direct sales force recruited for the understanding of innovative buyers and the trends to identify and extract needs and to bring a deal to the table.

Think about that. That’s a visionary salesperson. That’s not an infrastructure salesperson. The guy or girl that you had put on the job is selling to IT or to finance or to admin is different from the one that we’re describing here because we’ve got an early market. Now there’s also some discussion down the bottom here about how much channel we use, but I’m going to save that for another day because it’s quite a detailed conversation, that resource modelling, but it is part of the channel choice. First one for channel partner strategy though is to identify what type of buyer do my buyers want to buy from? That starts with who are the buyers and then how mature are they? Hope that helps. In next week’s show, I want to dive into the funnel process. Until then, may your funnel be full and always flowing.